Press Release: November 24, 2016
1.What is my status?
First of all, make sure you are actually an independent contractor.
According to HMRC, a person is self-employed if they run their business for themselves and take responsibility for its success or failure. Self-employed workers aren’t paid through PAYE, and they don’t have the employment rights and responsibilities of employees.
Typically, independent contractors are highly skilled and provide organisations with extra specialist knowledge and resources as and when they are needed. And they often pay less tax and take home a greater slice of their earnings.
However as a contractor it is crucial to know you are not actually a ‘disguised employee’. Your status will be determined by the actual working arrangements you have with the organisation. These will then determine whether you will fall under IR35 (Intermediaries Legislation) tax legislation which may see you liable to pay increased tax and N.I contributions.
HMRC have tools to help you identify your status. But your specialist contractors accountant must have the expertise and knowledge to help with this and to keep you out of the scope of IR35.
2. Is the accountant a contractor specialist?
Most contractors have simple but specific accounting needs and a specialist accountant should be well versed in the workings style, needs and requirements of a contractor. A general accountant may not really know how the life of a contractor works. Because of this, a high street accountant may charge you too much because they think your needs will be greater than they actually are.
More crucially, a general accountant may not realise the importance of IR35 and keeping you compliant and outside its reach. If they don’t, this could have huge implications for your take-home pay.
Make sure they have the most up-to-date knowledge so can advise you on the best tax breaks etc As well as book-keeping your accountant should be looking for you to the pay least amount of tax possible while keeping fully compliant with HMRC.
3. Will you be looked after properly?
When you go to meet a potential new accountant face-to-face make sure you have your questions prepared. You will want to know just how much you can expect, so everyone is clear from the get-go.
For example, will you get your own dedicated account manager and if so, how many other clients will they be looking after at the same time? How accessible will they be to you? How experienced will they be? (You don’t want to be fobbed off with a trainee). How often can you contact them? How long will they take to get back to you? How often will you meet? You want to find out as much as about what they will do for you and what you need to do. And it is worth asking, what to do if you are not happy with the service? Do they offer refunds if you’re not happy?
4. Do they offer cloud accounting?
Cloud accounting software saves time for you and the accountant which ultimately will save you money in the long run.
It also means you both will have access to, and be able to update your accounts all the time, in real time.
If you’re unsure and this is all very new to you, it’s perfectly reasonable to ask to ask for a demonstration.
5. What do other people think?
Most firms will acquire new clients via word-of-mouth. So make sure you ask to see any written testimonials and/or ask for the numbers of current clients that would be happy to speak to you.
6. How much will I be paying?
Ideally, the accountant will offer fixed monthly fee packages offering different levels of service. It’s best to be as up front as possible about what you can expect for what you will pay - after all, no one wants any surprises and as a contractor you certainly don’t want hidden costs or fees springing up at the end of the month.
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